When it comes to launching a new product, one of the biggest questions product startups face is: Should we launch on Amazon or in retail stores first? Both channels offer unique benefits and challenges but for many emerging brands, Amazon often provides a faster, more scalable path to market. We will break down the pros and cons of launching on Amazon vs. traditional retail, and help you decide which route is best for your business.
Why More Startups Are Choosing Amazon First
Launching your product on Amazon has become the go-to strategy for many product startups and for good reason. Here’s why:
- Retail Accessibility Without the Red Tape: Getting into brick-and-mortar retail requires building relationships with buyers, meeting strict vendor requirements, and navigating long sales cycles.
Amazon, on the other hand, removes many of those barriers. With a seller account and some basic setup, you can list your product and start selling within days and not months. - Massive Reach and Global Audience: Amazon isn’t just a marketplace it’s a global sales engine. With over 300 million active users and marketplaces in multiple countries, startups can quickly reach a vast audience without needing a physical presence. Whether you’re selling in the U.S., Canada, Europe, or Asia, Amazon opens the door to worldwide distribution.
- Built-In Marketing and Visibility Tools: With Amazon’s built-in SEO, product recommendations, and paid advertising (Amazon PPC), your product can be discovered by thousands or even millions of potential buyers. Amazon also has customer reviews, best-seller badges, and other trust indicators also help build credibility faster than most retail channels can offer.
The Drawbacks of Selling on Amazon
While Amazon is an attractive launchpad, it’s not without its downsides:
- Fees Can Eat Into Margins: Amazon charges referral fees, FBA fees (if you use their fulfillment service), and other costs that can shrink your profit margins. For premium products or lower-margin items, these fees may be a dealbreaker.
- Tough Competition and Price Pressure: Amazon’s open marketplace means you’re often competing with similar (or knockoff) products. It can be a race to the bottom unless you have a strong brand, unique value proposition, or protected IP.
- Limited Brand Experience: You don’t control the customer journey the way you would on your own website or in a retail store. Your branding is secondary to Amazon’s interface, which can make it harder to build long-term brand loyalty.
What About Launching in Retail Stores?
Launching in brick-and-mortar retail still has its place especially for brands that:
- Have a product that benefits from hands-on experience (e.g., wearables, home goods)
- Want to build brand trust by being seen in major retailers
- Have the resources to support inventory, packaging compliance, and in-store marketing
Retail can offer higher perceived value, stronger brand presence, and access to loyal shoppers who still prefer buying in-store.
However, getting into retail is more complex and time-consuming. From navigating buyer meetings and pitch decks to managing retail compliance and merchandising, most startups need expert guidance to succeed.
Amazon vs. Retail: Which Is Right for You?
There’s no one-size-fits-all answer. The best approach depends on your product type, margins, resources, and long-term goals.
Choose Amazon First If You:
- Want a fast, low-barrier way to test product-market fit
- Have limited capital and want to scale quickly
- Are looking to build online reviews and proof of concept
Choose Retail First If You:
- Have strong margins and manufacturing capabilities
- Want the prestige of being on retail shelves
- Have a product that sells better when seen or demonstrated in person
Get Help Launching in Retail
At Retailbound, we specialize in helping product startups navigate both retail and Amazon sales channels. Whether you’re just starting out or ready to scale, our team provides hands-on support to make your launch successful from strategy development to buyer introductions.
Since 2008, we’ve helped over 500 brands get into 150+ major retailers across the U.S. and Canada. Contact us today to see how we can help you break into retail and scale your brand the smart way.
About the Author
Yohan Jacob is the Founder and President of Retailbound, a retail channel management agency that helps emerging and established brands launch, scale, and thrive in both e-commerce and brick-and-mortar channels. With over a decade of experience and a proven track record, Yohan has helped product companies succeed in stores like Best Buy, Target, Home Depot, and more.
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